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Copper heads for worst week since early July

Copper heads for worst week since early JulyLONDON: Copper inched lower on Friday, heading for its worst week since early July as strikes, including at the world’s largest mine, seemed mostly resolved but a weaker dollar provided some support.

Benchmark copper  slipped 0.6 percent to $5,900 per tonne by 1100 GMT, on track for a near 5 percent decline for the week. The metal used in power and construction has fallen in five out of the last six sessions.

The first workers to review a proposed labour pact at Chile’s Escondida are in favour of signing the new contract, a union spokesman said on Thursday, following news that a strike was on hold at the mine.

Meanwhile, the main union at Chile’s Caserones copper mine said its members had approved management’s labor contract offer by a wide margin, pending a final revision of the document.

“Copper price eased on the back of Escondida looking like its fully negotiated a contract,” ETF Securities analyst Nitesh Shah.

ING BANK: “These successful negotiations have certainly not helped the copper market, at a time when broader macro concerns have weighed heavily on the metal,” analysts at the bank said.

TRADE: US President Donald Trump has rattled the world trade order by seeking to renegotiate the terms of some of the United States’ trading relationships to combat what he calls unfair trade practices by China, Europe and other countries.

The moves have sparked a bitter tit-for-tat trade dispute with several countries and fears that metal demand could suffer.

“We need to see some more substantial turnaround in the global trade war story and also for the dollar for copper to make a rebound,” said Danske Bank analyst Jens Perdersen.

TALKS: China and the United States will hold lower-level trade talks this month, the two governments said on Thursday, offering hope that they might resolve an escalating tariff war that threatens to engulf all trade between the world’s two largest economies.

Copper has slipped about 18 percent so far this year partly on fears that a trade standoff between the world’s largest economies would sap demand, especially from the world’s top consumer China.

But analysts now fear prices have fallen too low.

“Barring additional negative shocks in the global economy, we think copper is oversold at this point,” Goldman Sachs said in a note this week.

Copyright Reuters, 2018

Source: Brecorder

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